Every 40 seconds a person dies from suicide globally. Losing a loved one through suicide is the most devastating thing to experience. But how will this impact someone who had a life insurance policy in place? The difference between their claim being accepted or denied is all based on timing.
Does life insurance cover suicidal deaths?
Life cover payouts are usually done when the policyholder dies or has been diagnosed with a terminal illness, but what happens if the cause of death is suicide? Insurers understand that dealing with the loss of a loved one is a painful experience, which is why you can still be covered for a suicidal death. However, there is a two-year clause that policy holders need to be aware of to make sure that they are covered.
The two-year clause to be aware of
Most life insurance policies in South Africa have a 2-year clause. There is a set of guidelines you will be informed of in terms of things that are covered and not covered by your insurer. One of these clauses is that an insurer will not cover death resulting from suicide within the first 24 months (2-years). Should a policy holder die due to suicide during the first 2- years of having their policy, an insurer can deny a claim. Therefore, it is important to carefully read the terms and conditions that come with your policy, especially the exclusions to avoid any surprises.
Why does the 2-year clause exist?
Life insurance is a promise that your insurer makes that should you pass on, your loved ones will be taken care of financially. However, due to the various ways in which people pass on, insurers need to protect themselves from people who would want to ‘cheat the system’ so that a claim could be paid out.
Exclusions such as the suicide exclusion are put in place to protect the policyholder (the person whose name the cover is in) and the insurer. For example, it is to avoid someone taking out a policy worth millions of rands just days before committing suicide, leaving the insurer to pay out a large lump sum with having only collected one monthly premium.
Can you still get life cover even with a history of depression?
Yes, it is still possible to receive life cover from an insurer even if you have had a history of depression. However, it is important that you are honest by disclosing this with your insurer. Most insurers view situations on a case-by-case basis on whether they will be able to cover you or not. In some cases, loadings could be added. However, the more recent the episodes of depression or attempts at suicide are, the less likely it will be for you to be covered.
